2001 (7) TMI 100 - HC - Income Tax

Summary

Issues involved:
Challenge to notice u/s 148 of the Income-tax Act, 1961 for reopening assessment u/s 143(3) for the assessment year 1992-93 based on change of opinion and failure to disclose material facts.

Facts:
- Petitioner, an Export House, filed return of income for AY 1992-93 claiming deduction u/s 80HHC.
- Assessment completed by respondent partially disallowing deduction claimed.
- Impugned notice issued in 1999 alleging income escapement.
- Petitioner requested reasons for notice issuance.
- Petitioner filed return without prejudice to challenge notice, maintaining deduction claim.
- Present petition filed against notice.

Arguments:
- Petitioner argued notice invalid as reopening based on change of opinion without fulfilling pre-conditions.
- Department relied on Explanation 2 to section 147 and section 149 for validity of reopening assessment.

Findings:
- Court found merit in petition, noting the four-year limit for reopening assessment.
- Department's reasons for reopening assessment based on change of opinion, not failure to disclose facts.
- Deeming provision in Explanation 2 to section 147 deemed inapplicable.
- Section 149 only prescribes time limit for notice, not grounds for reopening.
- Court satisfied that reopening sought based on change of opinion without evidence of failure to disclose facts.

Conclusion:
- Impugned notice set aside, both writ petitions allowed with no costs.